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NEW JERSEY BILL LOOKS TO FINALLY DEFINE THE DIFFERENCE BETWEEN “SIMPLE MISCONDUCT” AND “SEVERE MISCONDUCT” IN NEW JERSEY UNEMPLOYMENT COMPENSATION LAW

In 2010, Governor Christie and the New Jersey state legislature revised New Jersey Unemployment Compensation Law to include a new “severe misconduct” standard to disqualify certain employees from receiving unemployment benefits. Because of the ambiguity of the statutory revisions to the revised law, New Jersey unemployment lawyers, claims examiners, employers and employees have been left without clear guidance as the difference between being terminated for “severe misconduct” versus the “simple misconduct.”

The revised New Jersey Unemployment Compensation Law did not change the definition of simple misconduct. Simple misconduct is defined as actions that are improper, intentional, connected with one’s work, malicious and within the applicant’s control and is either a deliberate violation of his or her employer’s rules or a disregard to standards of behavior that the employer has the right to expect of the applicant. A simple misconduct disqualification will prevent an applicant from receiving unemployment benefits for the week of the termination and the subsequent seven weeks.

The major change contained in the revised legislation was to include a new “severe misconduct” category for disqualification of unemployment benefits. Under the revised law, being terminated for “severe misconduct” will disqualify a claimant from receiving unemployment benefits indefinitely or until he or she becomes re-employed, works for four weeks, earns at least six times their weekly benefit amount and is terminated from that employment due to no fault of their own. The problem with the enactment of the new “severe misconduct” standard is that it is completely void of a definition of what constitutes “severe misconduct.” Instead, the revised statute only sets forth “examples” of “severe misconduct” that include the following: repeated violations of an employer’s rule or policy, repeated lateness or absences after the applicant receives a written warning from their employer, falsification of records, physical assault or threats that do not constitute gross misconduct, misuse of benefits or sick time, abuse of leave, theft of company property, excessive use of drugs/alcohol on the job, theft of time, or where the behavior is malicious and deliberate but is not considered gross misconduct.

The “example” of severe misconduct that “the behavior is malicious and deliberate but is not considered gross misconduct” is in clear conflict with the definition of the supposedly lesser “simple misconduct” standard. However, by its very definition, the “malicious and deliberate” behavior example of severe misconduct has effectively rendered the simple misconduct standard meaningless because severe misconduct is a lesser standard. This, of course, makes no sense.

As a result, our New Jersey unemployment lawyers have witnessed claimants who would have been eligible for unemployment benefits pre-2010, be denied their claim for unemployment benefits because an examiner believed their conduct was “malicious and deliberate” thereby constituting “severe misconduct”. As a result, instead of being eligible to receive unemployment benefits (or at worst, face a seven week disqualification for simple misconduct) many New Jersey employees have become completely disqualified for “severe misconduct.”

There is proposed legislature that would finally remedy this serious problem that our New Jersey unemployment lawyers and clients are routinely confronted with their initial determinations or unemployment appeals. On December 3, 2012, the Assembly will vote on a bill to repair and clearly define the differences between a simple misconduct termination and a severe misconduct termination. If adopted, the new simple misconduct definition will read as follows:

“Simple misconduct” means misconduct, other than severe or gross misconduct, which is improper, intentional, connected with the individual’s work, malicious, within the individual’s control, not a good faith error of judgment or discretion, and is either a deliberate failure, without good cause, to comply with the employer’s lawful and reasonable rules made known to the employee or a disregard of standards of behavior the employer has a reasonable right to expect, including reasonable safety standards and reasonable standards for a workplace free of drug and substance abuse. “Simple misconduct” includes: (1) repeated failure, without good cause, to comply with lawful, reasonable instructions of the employer not requiring the employee to perform services beyond the scope of the employee’s customary job duties; (2) falsification of an employment application or other record required by the employer to determine the employee’s qualifications or suitability for the job or omitting information which created a material misrepresentation of the employee’s qualifications or suitability for the job; (3) tardiness without good cause which is chronic or excessive and repeated after written warnings from the employer; and (4) repeated unauthorized absences without good cause, such as illness or other compelling personal circumstance, or unjustified failure to provide notice prior to the unauthorized absences. An unauthorized absence without good cause for five or more consecutive work days may constitute job abandonment and subject the individual to disqualification for voluntarily leaving work without good cause attributable to work pursuant to subsection (a) of this section. An individual’s discharge for failure to meet the employer’s standards regarding quality or quantity of work shall not be considered misconduct unless the employer demonstrates to the division that the standards are reasonable and that the individual deliberately performed below the standards.

R.S. 43:21-5 (A1874 Establishes standards regarding the disqualification of claimants for unemployment compensation for misconduct).

The “severe misconduct” definition would be as follows:

“Severe misconduct” means misconduct connected with the individual’s work other than gross misconduct, which: (1) is committed with actual malice and deliberate disregard for property, safety or life of the employer, fellow employees, contractors, invitees of the employer, or members of the public at the worksite, or consumers of the employer’s products or services, and consists of physical assault, threats of physical assault, or theft or other employee-caused property or monetary loss or damage so serious that it is determined by the division that the penalties for simple misconduct are not sufficient; or (2) is comprised of a pattern of instances of simple misconduct which are, after repeated written warnings from the employer, repeated so frequently that they cause substantial disruption of the employer’s operations or substantial property or monetary damage or loss for the employer which is so serious that it is determined by the division that the penalties for simple misconduct are not sufficient. Disruption of operations from a cessation of work during a labor dispute shall not be regarded as severe misconduct for the purposes of this subsection (b).

R.S. 43:21-5 (A1874 Establishes standards regarding the disqualification of claimants for unemployment compensation for misconduct).

If passed, this bill would truly be a victory for all New Jerseyans, especially those employees and their family members who have lost their job and are in need of unemployment benefits. The new language for simple misconduct gives a clear, descriptive, definition in addition to four (4) clear actions/types of actions which will constitute simple misconduct. As for severe misconduct, the new language provides an actual definition, instead of a short inadequate, non-inclusive list of examples. The new severe misconduct language provides two (2) clear, relatively high standards, an employer must demonstrate before a claimant can be disqualified for severe misconduct. Indeed, severe misconduct would finally rightfully be defined actions that more severe than an employee committing simple misconduct.

In its current form, the law has no clear standard for claims examiners to apply to the variety of different circumstances that occur in employee terminations. This has resulted in claimants being wrongfully denied benefits permanently or having to wait up to six (6) months for an appeal hearing due to the terrible backlog in New Jersey unemployment cases. Hopefully on December 3rd, the Assembly will vote in favor of this bill recognizing the necessary and positive impact it will have on New Jersey Unemployment Compensation law. We encourage all New Jersey citizens to reach out to their state representatives to express the importance of passing this law. To find out who your legislators are, please go to:

http://www.njleg.state.nj.us/members/legsearch.asp